Journal of Business Strategy

Kurt Matzler; Franz Bailom; Markus Anschober; Susan Richardson

2010 Journal of Business Strategy

doi: 10.1108/02756661011076273

Purpose – In a world afflicted with hyper‐competition, dynamic and increasingly rapid market changes, and global economic crises, there still exist, however rare, exceptional companies that have found a way to weather the storm and position themselves for a bright future. This study investigates success factors of top performing companies and drivers of innovativeness and corporate success. Design/methodology/approach – Based on a research study of over 700 European companies, this article explores ways in which many top companies have surged passed their competitors and achieved sustained corporate success. A synthesis of scientific studies, practical experience, and numerous conversations with successful entrepreneurs and senior executives, the results of the project are discussed in order to direct readers' attention to those levers that can help companies create, maintain and strengthen a competitive edge. Findings – The study identifies the pillars of success of high‐performing companies and shows how leadership, entrepreneurship culture, market orientation, core competences and leadership influence innovativeness and corporate success. Originality/value – Based on a large‐scale empirical study success factors are identified and it is shown how they work together. Examples of successful companies and interviews with senior executives give insights into the secrets of success of top performers.

J. Lee Whittington; Timothy J. Galpin

2010 Journal of Business Strategy

doi: 10.1108/02756661011076282

Purpose – Attracting and retaining a talented work force is a strategic imperative. Doing so requires organizations to create an overall context through a set of macro‐level organizational practices we refer to as the HR value chain. However, this organizational context must be supplemented at the micro level through leader behavior, job characteristics, and challenging goals. An evidence‐based integrative model of organizational practices is developed that will lead to a high level of employee engagement. Design/methodology/approach – The paper addresses several key questions: Do engaged employees perform better than those that are not engaged? How should companies best organize their HR processes at a firm‐wide level to foster employee engagement? What should companies do at an employee level to foster engagement? What is the role of employee to manager trust in employee engagement? A review and summary of existing empirical literature from the areas of employee engagement, human resources, strategy, and leadership was assembled to answer these questions and provide an evidenced‐based set of prescriptions for practicing managers seeking to enhance employee engagement. Findings – The evidence presented supports seven key engagement principles characterized by: an integrated HR value chain; full‐range leader behaviors incorporating contingent reward and transformational behaviors; job enrichment through variety, significance, and task identity; challenging and specific performance goals; in‐role job performance; extra‐role performance behaviors; and employee trust in their leader. Originality/value – The content of the paper is useful to executives and managers in firms of various sizes and across industries by: presenting empirically‐based evidence that engaged employees perform better than those that are not engaged; providing pragmatic recommendations regarding how to establish firm‐wide human resources process that foster workforce engagement; providing practical recommendations regarding what companies should do at an employee level to foster engagement; explaining the role of employee to manager trust in employee engagement; providing a bridge across the often decried gap between academic research and the practice of management.

Norman T. Sheehan

2010 Journal of Business Strategy

doi: 10.1108/02756661011076291

Purpose – This article integrates strategy mapping, risk management and management control into a risk‐based approach to strategy execution. It uses strategy mapping as a tool to visually depict the firm's strategy and then assess its risks. Based on this risk assessment, the firm's management control system is designed to manage those risks which are seen to have the greatest probability to negatively impact firm profitability. The proposed framework can be used on a stand‐alone basis or be used to complement Kaplan and Norton's work on strategy mapping. Design/methodology/approach – This article draws from the confluence of the risk management, management control, and strategy mapping literatures to illustrate how firms can improve their handling of risk. Findings – Strategy mapping is an effective tool to identify risks, while Simons' Levers of Control provides an effective alternative to manage the risks identified. Practical implications – A firm's future profitability depends on its ability to identify and manage risk. Given that firms only profit when they successfully manage risk, the design and application of its management control system must flow from an assessment of the risks assumed in its strategy. The primary advantage of an integrated risk‐based management control system is that it allows managers, in real time, to steer the firm towards the good things that were outlined in its strategy and away from any bad things. Originality/value – The article extends Kaplan and Norton's work by proposing strategy mapping as a tool to identify and then to help manage risks.

Nigel F. Piercy; David W. Cravens; Nikala Lane

2010 Journal of Business Strategy

doi: 10.1108/02756661011076309

Purpose – Harsh economic conditions have put pricing higher on the agenda but responses to pricing challenges have frequently been tactical. The intent is to build on basic pricing principles to emphasize a strategic perspective on pricing built around opportunities to deliver superior customer value. Design/methodology/approach – Our logic is drawn from the observation of company pricing practices and interesting moves from conventional to innovative pricing strategies. Findings – Our observations underline the need for executives to adopt a more strategic view of price and to examine the scope for raising prices, especially in a post‐recession economic scenario. Practical implications – Our action agenda addresses: why there is an urgent need to make pricing decisions strategically, particularly as economic recovery occurs, with important insights coming from innovative pricing models designed to deliver superior customer value; the role of price in strategic positioning – key management considerations are whether price is to play an active or passive role in marketing the product or service, and whether price is high or low compared to alternatives; the challenges of raising prices in recession and recovery conditions, where analysis underlines the importance of considering product differentiation from a customer perspective and comparing this with how strongly the customer needs the product; and the need to design a value‐based pricing strategy which integrates the conclusions reached about the strategic role of price. Originality/value – Viewing pricing as a “quick fix” and the only route to maintaining sales or protecting market share underplays the strategic importance of pricing and its long‐term strategic implications. We propose a management action agenda for making pricing decisions strategically.

Philip A. Dover; Udo Dierk

2010 Journal of Business Strategy

doi: 10.1108/02756661011076318

Purpose – Argues that three basic archetypes – managers, entrepreneurs and leaders – must exist within the “ambidextrous organization” where a balance must be found between managing the present while preparing for the future. Introduces the MEL‐Index, a measurement tool that represents the managerial, entrepreneurial and leadership capabilities of both individuals and institutions. Design/methodology/approach – The conceptual framework suggests that the interactive roles of the MEL archetypes have a profound impact on the innovation profile of the organization. To test this idea in‐depth, case studies with a sample of SME's and large companies in North America and Western Europe was conducted. Findings – Although still at an early stage of data collection, initial findings suggest that: it is difficult for strong managers to co‐exist with visionary entrepreneurs without the facilitating role of leaders; there may be a difference in the balance of archetypes needed in private versus, publicly owned companies; the measurement tool was easy to administer and has strong face validity. Research limitations/implications – The findings of this project are not generalizable to the greater population of businesses in Europe and North America due to the convenience nature of the sample. However, as we continue to collect data confidence will grow at the inferences drawn from our case‐based examples. Practical implications – By using the results from an MEL project, companies can adjust their balance of capabilities through more targeted recruitment, focused executive development programs and better internal allocation of personnel. Originality/value – Very little applied research has been undertaken to explore the combination of skills required of executives to guide the ambidextrous organization. Exploration of the MEL interface opens an exciting, applied research stream within management studies.

Betsy D. Gelb

2010 Journal of Business Strategy

doi: 10.1108/02756661011076327

Purpose – This study investigated perceptions useful for pricing decisions. Buyers observing premium prices may believe that “you get what you pay for,” but do buyers seeing low prices believe that “you do not get what you do not pay for”? This research tested the idea that these two statements often prompt different perceptions. Design/methodology/approach – Data came from a questionnaire completed by 105 working professionals in an evening MBA program at a metropolitan university. A randomly selected half received one version, asking about the statement “you get what you pay for.” The other half received an otherwise identical version asking about “you do not get what you do not pay for.” All were asked whether they believed the statement, Yes or No, and then asked to offer an example from their own experience to support that answer. Findings – As expected, different examples were offered, depending on the statement. Examples agreeing that “you get what you pay for” disproportionately involved quality. Examples of “you do not get what you do not pay for” disproportionately involved service or “extras” – whether they were examples in support of agreeing or disagreeing. Most respondents agreed with whichever statement they saw, but more agreed with “you get what you pay for.” Originality/value – Managers fearful that lowering a price will signal a drop in quality – exemplifying “you do not get what you do not pay for” – may be misreading the way buyers think. Those considering setting a higher price than they otherwise might, to signal better quality, have evidence here to support that view. So do those who, regardless of price level, offer occasional unexpected “extras.”

Stuart E. Jackson

2010 Journal of Business Strategy

doi: 10.1108/02756661011076336

Purpose – This article discusses one approach to innovation involving changing the way a product is delivered to customers. Building on the work of Kim and Mauborgne in the book Blue Ocean Strategy , Jackson acknowledges the appeal new product concepts with limited competition in “Blue ocean” competitive environments. The challenge for most consumer goods is coming up with entirely new products that have strong customer appeal, because most consumers have a familiarity and loyalty to products they already use. One solution to this is channel innovation. This involves finding new ways to deliver products that consumers already use and love. Design/methodology/approach – The author uses case studies of successful consumer products channel innovations in the areas of baked goods, juice drinks, pizza, salad and fresh produce. Findings – The key lessons from the case studies are in three areas: understanding consumer frustrations with how existing products are delivered; understanding the value of the channel innovation through comparison with alternative substitute products or services; and embracing new technology that can make new delivery channels work. Originality/value – The key message of this article is that innovating new products is good but executives need to recognize and take advantage of consumer loyalty towards products they are already familiar with. Channel innovation provides a valuable lens to develop and evaluate new products ideas that have a much higher chance of consumer acceptance than entirely new to the world innovations.

Patrick Marren

2010 Journal of Business Strategy

doi: 10.1108/02756661011076345

Purpose – Review and discussion of the book Lords of Strategy by Walter Kiechel III. Design/methodology/approach – Opinion column. Findings – “Strategy” has not been seen as something in which businesses must engage. The “Strategy revolution” Kiechel outlines arose in the 1960s with the new breed of consulting firm, had its heyday then and in the 1970s, and declined thereafter into something like incoherence and a focus on tactical, financial, and cost‐cutting approaches. Originality/value – Reviews an important book and extracts some lessons about business strategy.